CFOs And The Evolving Fintech Landscape

The merging of world markets and globalisation of economy sparked the transformation of corporate finance leadership over the course of the last decade or two. CFOs today drive change across the whole business, not just within the finance function. Here we analyse how best a CFO can help their company thrive in today’s evolving fintech landscape.

The merging of world markets and globalisation of economy ignited the historic transformation of corporate finance leadership over the course of the last decade or two. Gone are the days of traditionally risk-averse number crunching CFOs or when a tirade of degrees behind one’s name could assert their importance within the organisation. The evolution of the role of the CFO from just a phenomenal number whiz to an integral part of the C-suite is rather interesting. Tasked with steering their businesses through one of the worst economic times the world has witnessed since the Great Depression, CFOs used their expertise in cost management and operational efficiency to ensure the survival of their organisations. Those who survived the slump and led their companies to success earned the respect and confidence of executive management, the market, and external shareholders, helping to elevate the role of CFO from financial steward to corporate strategist. They now drive change across the whole business, not just within the finance function.

As more companies lay emphasis on cost reduction, vendor consolidation, and impactful suppliers, the finance and procurement offices are now at the seat of transformation. To aid this transformation, new technologies and tools can facilitate the entire process. With the world undergoing an unprecedented technological transformation like never before, entire industries and organisations are becoming increasingly aware of the importance of keeping abreast with evolving technology. Utilising this technology to make our lives easier and in your case, your role as a CFO, is the key. Today, CFOs must find new ways to sustain performance and grow the business. Rapid technological change, the rise of emerging markets, more empowered consumers and employees, and more active government intervention have all combined to disrupt traditional business models worldwide. Disruptive technologies, such as big data, cloud computing, mobile and social media are becoming mainstream to garner that competitive advantage over the others.

As their influence has grown, CFOs now not only manage disruption, but to also identify and invest in the business models, products, and services that will lead to sustainable, profitable growth. The tools and structures that worked well for finance leaders well in the past may no longer be efficient in the current settings. Cost levers that used to be effective are becoming less so, as margins become squeezed and incremental operational efficiencies are harder to uncover. In today’s volatile times, setting priorities and planning for future investments is rather challenging. In addition to this, complex organisational structures become roadblocks to CFOs gaining visibility into performance across the entire enterprise.

The use of cloud-based ERP, automation technology and Saas technology are gaining prominence in the finance scene to build agility and quality into day-to-day business processes. Similarly, blockchain and self-driving finance, unified ledger integration, AI and digital invoicing are set to transform the finance world in 2018. All this is indicative of a dramatic restructuring of the financial landscape in the year ahead. Corporates and enterprises alike need to keep up with the changing times and utilise digital technologies and ROI elements. Ensuring that companies get the best ROI, it is vital to venture out into newer avenues and embrace technology solutions. There are several hidden opportunities that can be mined to profit the company.

A company’s growth and success are dependent on various factors, one of which is smooth cash cycles that are mostly stuck in unpaid receivables that are almost always delayed. When these payments get delayed, it makes it hard for the company to stay afloat as it affects their cash flow. Traditionally, there have been different financial products to facilitate working capital funding like supply chain financing, working capital loans, overdrafts, cc limits, etc. However, these options required hours of elaborate paperwork and hidden charges by banks and other financial institutions.

Over the last couple of years, dynamic discounting has emerged as a viable option for buyers to bridge the gap between the supply of goods or services and payment by the buyer by making payments earlier than the due date at a discount on the invoice amount.

In KredX’s experience as a cash flow solutions provider, we have witnessed first-hand the improvement in efficiency and profitability across organisations through the use of dynamic discounting and invoice discounting products. By providing a holistic technological cash flow ecosystem for corporates and their suppliers we are able to bridge the gap between payables, receivables and their individual financing needs, allaying a CFO’s worries about the company finances and the treasury. The use of such a financial tech product in our experience has yielded organisations ~16% profits at zero-risk without the need to manage their suppliers on their own. This, right here is the power of change a CFO can bring into an organisation. By automating processes within the company and utilising technology to take their company to the next level, they have spearheaded the prospects of their business and redefined their role in the process.

With over $43 trillion dollars stuck in outstanding Accounts Payables globally, it paints a grim picture of the global business landscape because it slows down the economy due to lower efficiency. Now imagine a scenario where you could turn this around by offering a solution that could potentially free up at least $5 billion of these stuck accounts payables. By freeing even a part of this chockablock, you could make a huge impact on payments and the way businesses function across the globe. This global issue is what KredX and other fintech companies are attempting to solve through disruptive technology while making it profitable for larger corporates and benefitting the treasury at the same time.